Shri Gurmeet Singh Kohli Versus Commissioner of Customs (EP) , Mumbai

2017 (10) TMI 1204 - CESTAT MUMBAI

Penalty u/s 112(a) of the CA, 1962 - DEPB Scrips obtained fraudulently - Held that: - if circumstances establish that there is high degree of probability that a prudent man ought to act on the supposition that there was design to obtain DEPB scrips without any export and such scrips sold for duty free import in contravention of the law or abetting to achieve such ill object, such act against public Revenue calls for penal consequence to curb such mischief.
-
The term fraud within the meaning .....

the appellant. Jt. DGFT also causing enquiry found that the offending scrip was issued on the basis of false and fabricated documents for which that was cancelled. All such material facts evidenced by oral and documentary evidence failing to be controverted by the appellant, he faced penalty of ₹ 9.40 lakhs in the adjudication proceeding. Appellant in his inculpatory statements deposed his entire premeditated design in defrauding customs falsifying shipping bills, bank realization certific .....

ellant. 4. Revenue submits that fraud committed by appellant in the manner stated in the orders of the Authority below proved his contumacious conduct and deliberate intention to cause evasion committing fraud against Revenue for which his appeal should be dismissed in absence of any evidence to the contrary led by appellant. There is no rebuttal by the appellant against the probe result aforesaid without any good reason advanced by the appellant or any cogent or credible evidence adduced to pro .....

to deceive the exchequer, he perpetuated fraud against Revenue. Accordingly, he was liable to the penal consequence enacted under section 112(a) of the Customs Act, 1962. 7. Evidence Act does not insist on absolute proof for the simple reason that perfect proof in this imperfect world is seldom to be found. That is why under Section 3 of the Evidence Act, a fact is said to be 'proved' when, after considering the matters before it, the Court either believes it to exist or considers its ex .....

as design to obtain DEPB scrips without any export and such scrips sold for duty free import in contravention of the law or abetting to achieve such ill object, such act against public Revenue calls for penal consequence to curb such mischief. 8. Fraud in the eyes of law is viewed as under: (A) If a party makes representations which he knows to be false and injury ensues therefrom although the motive from which the representations proceeded may not have been bad is considered to be fraud in the .....

e to the party himself or from the ill-will towards the other is immaterial. Fraud involves two elements, deceit and injury to the deceived. (B) Undue advantage obtained by the deceiver will almost always cause loss or detriment to the deceived. Similarly a fraud is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by another's loss. It is a cheating intended to get an advantage. (See : S.P. Changalv .....

3 SCC 1]. (C) Suppression of a material fact would also amount to a fraud on the Court [(see Gowrishankar v. Joshi Amha Shankar Family Trust, (1996) 3 SCC 310 and S.P. Chengalvaraya Naidu's case (AIR 1994 S.C. 853)]. No judgment of a Court can be allowed to stand if it has been obtained by fraud. Fraud unravels everything and fraud vitiates all transactions known to the law of however high a degree of solemnity. When fraud is established that unravels all. [Ref : UOI v. Jain Shudh Vanaspati .....

t in the case of Chengalvaraya Naidu reported in (1994) 1 SCC I : AIR 1994 SC 853. Ram Preeti Yadav v. U.P. Board High School and Intermediate Education (2003) 8 SCC 311. (D) A person whose case is based on falsehood has no right to seek relief in equity [Ref : S.P. Chengalvaraya Naidu v. Jagannath, AIR 1994 S.C. 853]. It is a fraud in law if a party makes representations, which he knows to be false, and injury ensues therefrom although the motive from which the representations proceeded may not .....

toms Act, 1962, and Customs Tariff Act, 1975 are not merely taxing statutes but are also potent instruments in the hands of the Government to safeguard interest of the economy. One of its measures is to prevent deceptive practices of undue claim of fiscal incentives. (F) It is cardinal principle of law which is enshrined in Section 17 of Limitation Act that fraud nullifies everything for which plea of time-bar is untenable following the ratio laid down by Apex Court in the case of CC. v. Candid .....

ir artful circumvention. Thus construed, the term fraud within the meaning of these penal provisions is wide enough to take in its fold any one or series of unlawful acts committed or omissions made. An act of fraud on Revenue is always viewed seriously. "Fraud" and collusion vitiate even the most solemn proceedings in any civilized system of jurisprudence. It is a concept descriptive of human conduct either by letter or words, which includes the other person or authority to take a def .....

Thus construed, the term fraud within the meaning of these penal provisions is wide enough to take into its fold any one or series of acts committed. Such act or acts when demonstrate to be reasonably proximate to the clearance of imports duty free on the basis of the DEPB scrips fraudulently obtained against false documents filed before DGFT, a trader of such scrips has to face adverse consequence of law. 10. In view of the above discussions and the result of investigation as well as adjudicati .....